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Guest Article

Deloitte logo

(From the March 12, 2012 issue of Deloitte's Washington Bulletin, a periodic update of legal and regulatory developments relating to Employee Benefits.)

Labor Department Will Continue to Focus on Disclosure Initiatives


The Semi-Annual Regulatory Agenda released by the Labor Department reflects a continued emphasis on disclosure. With the issuance in January 2012 of final regulations under ERISA Section 408(b)(2) that govern the disclosure of compensation received by plan service providers, the Agenda reveals that further regulatory action will be focused on the Annual Funding Notice, Target Date Fund disclosures, a guide for the Section 408(b)(2) disclosures, and Pension Benefit Statements.

Greater Disclosure Is a Near-Term Objective

Final regulations are expected to be issued in mid-2012 under ERISA Section 101(f), which requires defined benefit plans to provide participants with an Annual Funding Notice. Around the same time, final regulations are expected to be released on the use of Target Date Funds as a designated investment alternative under ERISA Section 404(c). These regulations will also require greater detail in the disclosures being made to plan participants under ERISA Section 404(a). Also by mid-year, the Department is expected to propose regulations that will require plan service providers to furnish plan fiduciaries with a guide to the ERISA Section 408(b) disclosures in order to explain the documents that are furnished. Likewise by midyear, proposed regulations are expected to be issued regarding individual Pension Benefit Statements. ERISA Section 05 requires defined benefit plans to provide the statement every three years, with an annual alternative; while participant-directed individual-account plans must provide the statement quarterly, with an annual requirement for those that are not participant directed.

Other Near-Term Objectives: ERISA "Fiduciary" Definition and Claims Review

Also in the near term the Department remains focused on the definition of "fiduciary" under ERISA Section 3(21). It is concerned that the current regulation may be inappropriately limiting the types of investment-advice relationships that give rise to fiduciary duties. A previously-proposed regulation on the matter was withdrawn, with the Department announcing it wanted the benefit of additional input and review. The Agenda shows that a newly-proposed regulation on the definition of ERISA "fiduciary" is expected to be released by mid-2012.

In mid-2012, release is also expected of proposed regulations regarding the internal claims review process for employee benefit plans under ERISA Section 503. The Agenda explains that the goal is to strengthen, improve, and update the current rules.

Welfare Plans and PPACA Are Long-Term Action Items

The Department's long-term action items primarily concern welfare plans and, in particular, the Patient Protection and Affordable Care Act (PPACA). With regard to the PPACA, anticipated future guidance includes: maintaining "grandfathered plan" status; coverage of preventive services; dependent coverage of children up to age 26; internal and external appeals processes under the PPACA; the Summary of Benefits and Coverage and Uniform Glossary; and pre-existing condition exclusions, lifetime and annual limits, rescissions and patient protections. Non-PPACA items on the list include guidance on the Mental Health Parity and Addiction Equity Act, and fee disclosures for welfare plans. These are consistent with the items in the IRS's agenda.

More information on the Semi-Annual Regulatory Agenda for the Department of Labor and other Federal Agencies can be found on the Regulatory Agenda webpage of the Regulations.gov website.


Deloitte logoThe information in this Washington Bulletin is general in nature only and not intended to provide advice or guidance for specific situations.

If you have any questions or need additional information about articles appearing in this or previous versions of Washington Bulletin, please contact:

Robert Davis 202.879.3094, Elizabeth Drigotas 202.879.4985, Mary Jones 202.378.5067, Stephen LaGarde 202.879-5608, Erinn Madden 202.220.2692, Bart Massey 202.220.2104, Tom Pevarnik 202.879.5314, Sandra Rolitsky 202.220.2025, Deborah Walker 202.879.4955.

Copyright 2012, Deloitte.


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